First Phosphate Corp. (CSE:PHOS) said it has a viable case for developing its 100%-owned Lac à l'Orignal property in Quebec for phosphate concentrate production and the secondary recovery of magnetite and ilmenite concentrates with the release of a positive Preliminary Economic Assessment for the project.
The project would produce an annual average of 425,000 tonnes of beneficiated phosphate concentrate at over 40% P2O5 content, 280,000 tonnes of magnetite and 97,000 tonnes of ilmenite over a 14.2-year mine life, according to the PEA, which used indicated and inferred mineral resources in its calculations.
It will generate a pre-tax internal rate of return (IRR) of 21.7% and a pre-tax net present value (NPV) of $795 million, based on a 5% discount rate as of June 30, 2023, of the approximate 18-month trailing average phosphate price and the long-term consensus magnetite and ilmenite prices.
The project would generate an after-tax cash flow of $567 in years one to five, resulting in a 4.9-year payback period from the start of production, per the PEA.
First Phosphate noted that it has a memorandum of understanding in place with Belgium-based Prayon Technologies for up to 400,000 tonnes per year of phosphate concentrate offtake in addition to a long-term purified phosphoric acid toll processing agreement.
The company's president Peter Kent said the company was pleased with the results of the PEA and its timely completion.
"Our strategy to keep capex low and mine size-controlled echoes these PEA results nicely,'' he said in a statement.
"We're now in a position to prudently evaluate next steps for the company as we continue with our mission to apply a partnership-based approach to integrate vertically from mine to value-added production of purified phosphoric acid and lithium iron phosphate (LFP) cathode active material for the North America LFP battery industry."
First Phosphate is a mineral development company fully dedicated to extracting and purifying phosphate for the production of cathode-active material for the LFP battery industry.
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